than to raise fresh capital to meet demands from the European Union for higher reserve ratios.
AUDUSD: Australia will pressure China to embrace a free exchange rate during this week’s meeting in France of finance ministers from the Group of 20 industrialized nations, adding to the scrutiny of Beijing as U.S. lawmakers ramp up their rhetoric on the issue.
China’s leaders the valuation of their currency, know as the yuan, which is tightly controlled by the central bank. Canberra has been under pressure from trade unions and some lawmakers to take a more forceful stance with China as the free floating Australian dollar remains around historic highs, hammering the local manufacturing industry. Australia–one of the few developed economies to escape recession in recent years–also wants an urgent global response to the instability rocking the world economy.
China has defended its currency levels arguing the unit isn’t undervalued and is nearing a “balanced and reasonable level.” The yuan is up nearly 7% since June 2010, when Beijing unpegged its currency from the dollar, though without loosening its grip on the unit.
We expect a range for today in AUDUSD rate of 1.0080 to 1.0200 (Yesterday we set a short trade at 1.0180 and our stop loss was 1.0240. Those who short the trade, trail stop loss to 1.0210 and target further down.
Short at 1.0080
Stop loss at 1.0210 (trail stop loss from 1.0240)
Target at 1.0030, 0.9970 and 0.9930
EURUSD: That strong language indicates a growing frustration at Europe’s apparent inability to reach political consensus on tackling its debt crisis, where investors and governments alike await progress on a pledge by France and Germany to take steps to shore up the euro-zone.
Nations in the euro zone are considering how to increase, by as much as five times, to EUR2.5 trillion ($3.5 trillion), the size of the bloc’s rescue fund, European Union sources told AFP on Wednesday.
One is to turn it into a bank that could obtain funds from the European Central Bank through limitless loans, but “this option has been ditched as it would breach the EU treaty. A second option would see the EFSF insure holders of bonds from indebted states “up to 15% or 20% for instance,” thus covering part of their losses should a nation default.
We expect a range for today in EURUSD rate of 1.3730 to 1.3890 (Yesterday, we short the pair at 1.3640 ranges, as the pair drop below to 1.3600, we trail our stop loss to entry level.)
Limit Short at 1.3890 ranges
Stop loss at 1.3950
Target at 1.3830, 1.3760 and 1.3710
USDJPY: Federal Reserve officials left a series of options on the table which they could use if the U.S. economic recovery falters, but didn’t commit to any specific move when they last met three weeks ago.
Minutes of the Sept. 20-21 meeting of the Federal Open Market Committee, released with the customary lag on Wednesday, showed that two of 10 voting officials advocated taking bolder action to lift a limping U.S. economy.
But the Fed records didn’t say who those officials were, nor what sort of move they favored. Instead, the minutes revealed a long discussion of what steps could be taken to give the economy further support, including the controversial step of expanding the Fed’s balance sheet.
In the end, officials Sept. 21 settled for a recasting of the Fed’s $2.65 trillion portfolio in an effort to spur spending and investment by making credit cheaper. Three of 10 voting officials opposed the action, concerned that it wouldn’t do much to spur economic growth while raising the risk of inflation in the future.
We expect a range for today in USDJPY rate of 77.00 to 77.60 (We been holding the pair almost two week since 04 october. Where we bought at 76.60 and now we close the trade. As mentioned that the pair possible head toward 80.00. We prefer to stay out for now.)
